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Thursday, 2 September 1993
Page: 881


Senator TIERNEY (11.37 a.m.) —I also wish to take note of the answer Senator Troeth has just referred to. The government is not getting any better on this issue—we have heard from Senator McMullan, yet again, today. I compliment Senator McMullan on doing at least one thing—he came clean on the real reason why the government is doing this. It has obviously been under pressure—and he admitted this today—from the beer and spirits industries. It is their right to bring pressure to bear on the government, but what the government did not do was listen to what the wine industry had to say, particularly to find out what the devastating impact of such a measure will be, and I will be going into some of those points in a minute.

  Unlike the wine industry, there has been a very longstanding series of taxes and duties on spirits and beer. Let me remind the Senate of what has happened in the wine industry. In this industry there was a zero sales tax rate 10 years ago. That rate has gone from zero to 10, to 21, to 31 and, in such a short space of time, each time a change has been made it has had a marked downturn on the sales of wine in this country.

  Let us have a look at the impact. Senator Sherry claimed last week that the impact was fairly minor. He said it would add only $1 a bottle.


Senator Sherry —No, I didn't—$1 on a $10 bottle.


Senator TIERNEY —I am glad Senator Sherry is here. I take his point, but let me tell him what is really happening because he is not full bottle on this. Let me read to him what one of the top vignerons in the Hunter Valley had to say about that $1 on $10. I seek leave to incorporate this document in Hansard.

  Leave granted.

  The letter read as follows

MURRAY ROBSON WINES

Varietal Wines of the Hunter Valley, Australia

Founded 1970

Murray Robson, Winemaker-Viticulturist

26 August 1993

Senator John Tierney

Shop 1 Metway Centre

169 King Street

NEWCASTLE NSW 2300

Dear Senator Tierney

Thank you for sending me copies of your questions, and speeches, in the Senate Re our industry.

I will quote you two examples of the direct effects this tax is having at my winery:

In the last two weeks two different people called here to buy wine—they both buy two to three cases at a time. Because we had to add $1.00 a bottle, one person only bought 6 bottles and the other 4. You can see that the money factor does not equate but mentally the price was over their limit and we lost badly.

We have an increasing wholesale business in NSW selling to retailers, their comments are that sales have slowed because of the public perception of increased prices and uneasiness even though the increase in prices is only just now filtering through.

We are not game to increase our wholesale prices at this point and must bear the extra tax which cuts out any real profit.

My personal thanks for taking up our cause in Parliament.

With best wishes

Yours sincerely

Murray Robson Wines Pty Ltd

Murray Robson

The letter states:

Recently two different people called here to buy wine—they both buy two to three cases at a time. Because we had to add $1.00 a bottle—

that is Senator Sherry's figure—

one person only bought 6 bottles and the other 4. You can see that the money factor does not equate but mentally the price was over their limit and we lost badly.

That is happening right across the country. The Winemakers Federation wine sales tax impact statement reads:

Retail price of wine increased by between 9 per cent and 15 per cent

Domestic wholesale sales diminish from $1 billion to $900 million

Sales tax collection (full year) from $200 million to $279 million

  . . .        . . .       . . .

Wine sales volume from 311 ml to 279 ml

Grapes displaced 50,000 tonnes

Loss of export income $126 million pa

Investment lost in new vineyards $250 million

Investment lost to inventory $160 million

Investment lost in winery plant and equipment $35 million

This is from a government, fellow senators, that is trying to create jobs. Look at the destruction it has wrought by this ill-considered measure. It has cut a booming industry off at the knees. It deserves to be condemned by the Australian people and I call on the Australian Democrats, the Independents and the Greens in the Senate to stop this government with this last measure, to force it into a backdown because it is destroying jobs and it is destroying exports.